Although for many people the science of accounting is considered a simple calculation system, in fact, accounting itself acts as a process that is not simple. That is why the notion of accounting is quite complex and has many definitions.
Meanwhile, this knowledge is widely used in daily applications, especially related to business activities. With accounting knowledge, entrepreneurs can monitor business related, whether it is running well or not.
Especially, in terms of recording financial statements. The course of the inflow of transactions or cash in a company really needs the role of accounting science. This also makes many parties use software and tools to facilitate their work in the accounting field.
To discuss more about accounting itself, see the discussion below.
Knowing the Definition or Understanding of Accounting
As mentioned earlier, accounting is not just a system of calculations, but rather a complex field of science.
Accounting itself is defined as a process that begins with recording, classifying, managing, presenting data to recording transactions related to finance in a company. The information taken is used by an accountant who is an expert in his field for making decisions.
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Not only that, another understanding of accounting is known as a business language whose role is to measure the results of economic activities in an organization or company accompanied by the delivery of information to certain parties. These parties are management, creditors, investors and regulators.
The importance of accounting in a company makes certain parties succeed in developing theories related to the world of accounting. This makes it easier to carry out activities to the maximum. One of them is through accounting software which is considered quite helpful.
However, in practice, as an entrepreneur or a professional accountant, you must still know the basic accounting knowledge that is managed manually.
The breadth of the notion of accounting also touches on other types of accounting. Namely the existence of financial accounting and management accounting. Where, the notion of financial accounting itself has a definition as a field in charge of managing company transactions and at the end of the period will produce output in the form of financial statements.
Meanwhile, the notion of management accounting is in the field that aims to produce financial information with a target to the management or managers of a company.
In another sense, management accounting also has a definition as an accounting field whose output is intended for the company’s internal parties.
Understanding Accounting According to Experts
Many experts who have different fields of science so that the definition or understanding of accounting is also different. You can see these differences from the various definitions of accounting according to the following experts.
Suparwoto states accounting as a system or a technique to measure and manage financial transactions and provide management results which are carried out through the form of information to internal and external parties of a company. The external parties referred to by Suparwoto are government creditors, investors, labor unions, and so on.
Not much different from Suparwoto, Soemarsono stated that the notion of accounting is a process of identifying, measuring, and reporting economic information that aims to enable clear, firm judgments and decisions for those who need the information.
3. Sofyan Harahap
According to Sofyan Harahap, the notion of accounting has a definition as the process of identifying, measuring houses to the delivery of economic information as an ingredient in considering various alternatives to draw conclusions by the users.
Sunyanto defines accounting as a stage in the process of collecting, identifying, recording, classifying, summarizing, and presenting or reporting a financial transaction and interpreting the results for the purpose of decision making.
Accounting Objectives for Those in Need
In addition to knowing the meaning of accounting, you will also know the purpose of accounting itself. Based on the discussion above, related to the understanding or definition of accounting itself, it can also be seen that accounting has a main purpose as a process to produce or present information about the economic world from an economic entity to parties who are companies or interested parties.
This goal is very important in a company. The reason is, through economic information which is related such as financial information, controlling in a company can be managed properly. In addition, the progress or development of a company or organization can also be known periodically through economic information from accounting science. That is why, accountants have an important role in a company, especially to achieve the goals of accounting itself.
Benefits of Accounting for Stakeholders
Understanding accounting is known to be quite complex, it is no different from its benefits which are also growing widely. The reason is, not only one or two benefits resulting from accounting, but also quite a lot and wide.
Accounting information is generally used by creditors, governments, investors, managers, employees, to company leaders. Related information is useful for them because it can be used as a basis for decision making and also evidence of the accountability of a company’s management to its leaders.
Not only that, accounting is also used as material to find out the company’s development from year to year. So, based on the related explanation, accounting also has benefits as an intermediary to obtain financial information in a company, evidence of accountability, management or management to the owner, and also serves as a source to find out the progress or progress that has been made by a related company.
In addition to knowing the meaning of accounting, its objectives, and benefits, you also need to know some of the accounting functions as follows.
1. Report Record
The function of accounting itself is to maintain a record of reports through recording or recording transactions carried out systematically and chronologically.
2. Protecting and Preserving Property
When viewed from the notion of accounting, the field of accounting also has a function as a medium to calculate the number of realities in a compilation of assets by a company as a real owner. This can make the property can be protected and maintained properly.
3. Classification and Summarizing
Another function of accounting is for classification which is related to the analysis carried out systematically through recorded company data.
In addition, it also functions as a presenter of confidential data in an understandable and certainly useful way for internal and external companies related to the accounting report itself. Where, this one process is more focused on reporting the trial balance, to the income statement.
4. Legal Meeting
If you pay attention to the notion of accounting, then indirectly you also know another function of accounting as a legal meeting. Where, the purpose of the legal meeting itself is to design and develop systems such as maintaining records to reporting results which in the future will legally meet legal requirements.
That is a complete discussion related to the world of accounting starting from the understanding of accounting, its objectives, benefits, and functions. Don’t forget to visit our main offers page to get other interesting information you need.
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